Sen.
Warren demands answers from U.S. regulators over Cohen firm
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[April 21, 2016]
WASHINGTON (Reuters) - U.S. Senator
Elizabeth Warren, a firebrand of strong financial regulation, wants to
know why securities regulators approved Steve Cohen's new firm as an
investment adviser after barring the billionaire from managing other
people's money until 2018.
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In a letter sent on Thursday to the U.S. Securities and Exchange
Commission, the Massachusetts Democrat said the regulator's decision
to approve the firm, Stamford Harbor Capital L.P., makes "a mockery
of the SEC's core mission to 'protect investors.'"
"The Commission has permitted a recidivist hedge fund manager,
well-known for his former company's willingness to evade and ignore
federal law, to once again profit from - and potentially exploit -
investors," she wrote, adding it is "the latest example of an SEC
action that fails to appropriately punish guilty parties, deter
future wrongdoing, and protect investors."
In 2012 Cohen was implicated in an insider trading scandal at a unit
of SAC Capital Advisors, a hedge fund he founded. The SEC in January
reached a settlement with Cohen prohibiting him from serving in a
supervisory role at any broker, dealer, or investment adviser until
2018, addressing charges related to the SAC subsidiary.
Earlier this month the SEC granted registration to the new entity,
which Cohen owns.
A statement from a Stamford Harbor spokesman said Cohen will "not
supervise the activities of anyone acting on its behalf," thus
allowing him to abide by the agreement he reached with federal
regulators.
The firm will initially focus on investments in private companies
that are illiquid, or can be difficult to sell quickly, according to
filings. But it could also seek or accept outside capital in the
future.
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Warren said the firm had a "shell management structure" and the SEC
should ensure "that future settlement agreements cannot be so easily
undermined."
She asked for a complete list of "other individuals or firms who,
like Mr. Cohen, were barred from managing funds (or barred from
other activities by SEC) yet are presently indirectly involved in
those activities with SEC-registered entities."
(Reporting by Lisa Lambert; editing by Andrew Hay)
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